Cuts Watch #391: Liverpool Council publishes its budget proposals

Liverpool City Council has set out its budget proposals for 2011-12 on how it will make £91m of savings during the year. The proposals will be considered by the full council which meets to set the budget on Wednesday 2 March.

More than 80% of the Council’s funding comes from Government grants, however the City has seen significant reductions in its major specific grants as set out below.

Specific Grants lost (affect most deprived communities)

Funding Source

From ( £m)

To (£m)

%

Working Neighbourhood Fund – targeted at deprived communities

32.0

-32m

0

-100

Supporting People– supports 12,500 vulnerable people in the city

37.0

-11m

26.0

-30

Early Intervention Grants e.g. Childrens Centres

33.0

-6m

27.0

-18

Other Grants – mainly adult social care including carers and mental health

24.2

£-8m

£15.9

-33

Total

126.2

-£57m

68.9

-45

The Council has had the maximum possible reduction in formula funding from the Government and has had its general revenue funding cut by over 22% in the next two years. The effect of the cuts in Government funding is that the city has a budget gap of £91m for 2011/12 and an additional £50m for 2012/13. The Council says the scale of the frontloaded cuts means that significant effects on Council services are unavoidable, and that the council is currently estimating between 1,100 and 1,500 jobs are at risk from its spending cutbacks.

Liverpool has been hit hard by the Local Government finance settlement; despite having some of the highest levels of deprivation, Liverpool is among the local authorities that face the maximum cut of 8.9%. The spread of cuts in the UK has not been even, the settlement has resulted in the poorest councils facing the biggest hits. Richard’s post shows us that the six most deprived Councils are all facing the maximum cut, and that out of the 37 local authorities facing the maximum reduction only two are less deprived than the average. Analysis by Children and Young People Now also shows that local government cuts will disproportionately affect authorities with higher numbers of children in need. Of the 27 authorities facing cuts in the coming year of eight per cent or more, eight — Liverpool, Hackney, Hull, Islington, Manchester, Nottingham, Southwark and Tower Hamlets — are ranked in the bottom 10 of the children in need rank of average scores, according to the Local Index of Child Well-Being 2009.

The council in Liverpool calculates that, had the Government reduced the city’s funding by the national average, the council would have been better off by £26m and the worst cuts would have not have not been necessary.

Councillor Joe Anderson, City Council leader, said:

There is no disguising the fact that these are the most severe cuts we have had to make in generations. While we have tried to protect frontline services, especially those to vulnerable people, the sheer scale of the cuts mean that it has not always been possible to do that…….…We have had to make heartbreaking decisions which will cause real pain in our communities. That is a direct result of Liverpool being the hardest hit of any council in the reduction of grants, grants previously given in view of the levels of deprivation in the city. Unfortunately the deprivation remains but the money has been removed.

My previous postalso shows how Liverpool has been affected by spending cuts and why Liverpool and the Northwest are particularly vulnerable to cuts. More recent research by the Centre for Cities think tank on the impact of Government spending cuts also concluded that Liverpool is among the most affected cities in the UK.

Budget Proposals by Liverpool City Council – Summary of cuts

Children’s care services and adult social care have been protected as far as possible.

Adult social care

The Council’s (non grant) adult social care expenditure has only experienced a reduction of 3%. The Council will continue to fund critical and substantial care. Moderate care will no longer be funded.

Young People

The Early Intervention Grant which funds children’s centres has been cut by the Government by almost one half. The loss of grant over the spending settlement period is over £12m. The Council has protected the children’s centres from the full effect of the Government cut and will only reduce children’s centre’s funding over this period by £10m. The Council will provide funding to keep almost all the 26 children’s centres open, and will consult about the possible closure of four centres in the least deprived areas of the City.

The youth service will have to operate on a reduced budget, which in 2011/12 will be £5.5m a reduction of 28%, and in 2012/13 will be £5.05m.

Transport passes for children in further education can no longer be afforded, and there will be a restriction of transport pass eligibility for children attending their nearest suitable school.

Libraries and Leisure Centres

The resources available to Libraries and Leisure Centres have been reduced by 28% in order to protect care services to the vulnerable. Libraries budget will be cut by £458,000 in 2011/12 rising to £1.9m in 2012/13. Leisure centre funding will be cut by £1.6m in 2011/12 rising to £2.7m in 2012/13. There will be a reduction in the number of arts and cultural events funded by the Council.

Voluntary Sector

The Voluntary and Community sector is mainly funded by specific Government grants (Area Based Grant and Supporting People, etc). These specific grants have been cut by 47%. The Voluntary and Community sector will continue to be funded by the Council by over £19m, hoever this represents a reduction of £18m.

Highways and environment

Spending on road maintenance, street cleansing, parks and open spaces will be reduced by £5.8m.

Written by Anjum Klair

I work in the TUC’s Economics and Social Affairs Department. As a researcher I undertake labour market and economic analysis. As the Office Manager I am responsible for the management of the office which includes our conferences and seminars pro…